• The Pound Sterling finds temporary support near 1.2360 after retreating from 1.2470. More downside is likely after comments from Bank of England Deputy Governor Dave Ramsden on Friday, who said that upside risks to inflation have receded and that price growth could undershoot the central bank’s recent projections.
• Ramsden said "Over the last few months I have become more confident in the evidence that risks to persistence in domestic inflation pressures are receding, helped by improved inflation dynamics," Reuters reported. However, he warned that unlike the United States the backdrop to inflation in Britain was of continuing weak economic growth.
• Strong prospects for UK inflation easing sooner and a downbeat economic outlook are expected to allow the BoE to start reducing interest rates earlier than previously anticipated.
• The prospects for inflation easing further were also boosted by weak Retail Sales data for March. The Office for National Statistics (ONS) showed Friday that Retail Sales were unchanged in March compared with the previous month and below the 0.3% increase forecast by economists. In February, Retail Sales grew by a meagre 0.1%. The Retail Sales data is a leading indicator of consumer spending, so weak figures signal the deepening cost-of-living crisis due to higher interest rates by the central bank.
• Going forward, the Pound Sterling will dance to the tunes of the S&P Global/CIPS preliminary PMI data for April, which will be published on Tuesday. The Manufacturing PMI is expected to expand steadily by 50.3. The Services PMI is estimated to have declined slightly to 53.0 from 53.1.